Insider investor information from a pro.

HONOLULU ADVERTISER   May 20, 2007

 

BY LISA SCONTRAS

 

Custom Publishing Group

 

Whoever it is who keeps saying this is not a good time to buy real estate should keep saying it, according to one Oahu native. It’s making him a lot of money.

 

Robby Takara is a local real estate investor who only buys a property for one of two reasons: It generates an instant positive cash flow or instant equity because its asking price is well under market value. And he is finding more and more great deals like that here on Oahu thanks to the somewhat negative publicity about the real estate market in general.

 

“I see a lot of negative stories in the news, but to me that is all good news because it means more inventory to pick from and less buyers to compete with,” says Takara. “Some investors have even pulled out but others of us know that it doesn’t really matter what the market is doing ... if the deal is good — if it works — then I buy it.”

 

Skeptics may not believe it, but Takara let’s the numbers decide if a property works.

 

 

“If the rent revenue covers the mortgage and expenses, I’ll buy it,” he says. “I’ll take a small negative if it’s in a neighborhood that will appreciate. Or, if there is enough equity in the house to cover expenses, then I’ll fix it up and sell it — but it has to be considerably below market value.”

 

Takara says there are a lot more of these types of properties popping up right now. He’s currently in escrow on a property that he paid $120,000 less than what he thinks it’s worth.

 

“And it cash flows,” he says. “So I have option A and option B.”

 

Incredibly, this budding real estate mogul is only 27 years old. But he still remembers his first purchase at age 23.

 

“It was nerve racking,” he remembers. “But I had a great team helping me. I had Wells Fargo helping me with my loan and Mike DeMello at Prudential Locations educating me about what was going on in the market. I probably wouldn’t have done it without Mike — he was a really good asset and still is my personal Realtor.”

 

Today, Takara has his own company, Pacific Horizon Investments.

 

The trick to finding great properties to invest in, is finding great properties — that’s where DeMello, a partner at Prudential, becomes invaluable to his clients. On an ongoing basis, DeMello feeds his clients potential listings — identifies and shows properties that might meet their criteria and price range require - ments. If a client expresses an interest , DeMello speaks to the listing agent to gain as much insight on the property or understand the seller’s situation so they can strategize the best position for an offer.

 

When Takara finds a property on his own, DeMello assists him with finding the property history, as well as tax and ownership information.

 

“Sometimes I drive around and look for run-down homes,” Takara says. “Then I’ll call them. A lot of times the owner lives on the Mainland and we can cut a deal right on the phone.”

 

Takara, who is currently pursuing a business administration degree at the University of Hawaii, prefers real estate to stocks for one simple reason: leverage.

 

“With just 10 percent of my money, I can buy a home,” he says. “I can’t buy stocks that way.”

 

That’s the really great part about investing in real estate is you don’t need a lot of money.

 

“If you have good credit, you’ll need some money, but not a lot,” says Takara, who made his first purchase with $5,000.

 

The biggest thing is don’t get overwhelmed, get a good Realtor, and don’t be influenced by negative stories about the market.

 

“People hear all the negative stuff and they are afraid,” repeats Takara. “Even when the market was good there were people who were afraid. Just do it. You have no idea how easy it is.”

 

 

 

 

 

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